UPDATED 6:04 p.m.White House budget officials threatened a veto for a bill nearing the House floor that would expand timber harvests on federal lands scattered throughout western Oregon.

Cheered by environmental groups, Wednesday's veto threat presents another hurdle for rural counties seeking an economic boost from Oregon & California Railroad grant lands that were once a major source of lumber.

The White House action raised the visibility of the latest round in the long-running timber wars in Oregon. Several heavily forested counties south of the Willamette Valley have slashed their law enforcement and other services as their federal timber receipts have disappeared and their local economies have lagged.

At the same time, environmental groups say the legislation threatens a return to industrial clearcuts on federal lands that will damage the hillsides, muddy streams and threaten wildlife.

In a statement, the Office of Management and Budget said that it would recommend that President Barack Obama veto the bill if it reached his desk in its current form. The statement criticized not only the O&C provisions in the bill but also other parts of the legislation that the agency said would conflict with environmental laws and harm federal forests and range lands.

The White House budget office said the Oregon provisions "would undermine appropriate management and stewardship of these lands" while compromising habitat for endangered and threatened species. The statement said the bill "also contains seriously objectionable limitations on the President's existing authority" to create national monuments in areas with O&C lands.

The bill, H.R. 1526, received final approval Wednesday from the House Rules Committee to go the full House, where debate could begin as early as Thursday.

Reps. Peter DeFazio and Kurt Schrader, both D-Ore., and Rep. Greg Walden, R-Ore., drafted the Oregon provisions. It calls for placing about 1.6 million acres of the 2.8 million acres covered by the bill in a state-managed trust focused on timber production.

The measure also would temporarily extend a program providing federal timber payments to counties to help pay for local services

Sen. Ron Wyden, D-Ore., chairman of the Senate Energy and Natural Resources Committee, is drafting his own legislation and has indicated that he intends to try to negotiate a deal with the House. Wyden's aides declined comment Wednesday on the veto threat.

"I'm actually surprised by the tone and the force" of the letter, he said, although he added that he didn't think the veto threat would hinder House passage.

DeFazio, who has taken heat from many environmentalists who have long supported him, said he wasn't perturbed by the veto threat.

He said in a statement that if he were president, he would also threaten to veto the bill because of its many controversial provisions other than the Oregonsections.

"I have negotiated in good faith, from the minority, the best possible O&C solution that can pass the Republican controlled House," DeFazio said. "My goal is to move this bipartisan O&C solution forward to the Senate where I expect Chairman Ron Wyden will make changes so the bill can pass the Democratically controlled Senate and be signed by the president." Steve Pedery, conservation director of Oregon Wild, said the veto threat "probably gives Wyden more breathing room" to draft a bill quite different from the House measure.

Pedery said the White House statement helps elevate the same concerns raised by environmentalists and should help build opposition to the House bill.

Douglas County Commissioner Doug Robertson, president of the Association of O&C Counties, said he doesn't think the veto threat changes the basic political dynamic. Any successful bill, he said, will have to represent a deal struck by Wyden and key House members, including House Resources Chairman Doc Hastings, R-Wash.